AOL Aims At First-Time Computer Buyers
By Doug Olenick -- TWICE, 8/23/2004
Dulles, Va.— America Online will attempt to mine the 27 percent of the U.S. population that remains PC-less by introducing its own line of entry-level computers.
The AOL Optimized PC will carry a $299 street price and the buyer will have to sign a one-year contract for AOL's dial-up Internet service at $23.90 per month. The computer is slated to go on sale at Office Depot this month with other retailers picking it up at a later date, AOL said. The first units will be manufactured by Systemax with other vendors coming onboard later this fall.
Steve Baker, senior IT analyst for The NPD Group, Port Washington, N.Y., said the cost structure actually benefits AOL quite well. When the $299 price tag is added to the $286.80 Internet service charge it is well above packages sold by Gateway's eMachines brand, which start at $399, although Internet service is not included by eMachines. Baker added that the AOL deal is better than those run five years ago when it and MSN ran rebate specials that offered consumers $300 off a PC purchase if they signed up for three years of Internet service.
AOL's primary targets are low-income families and minorities whom company research has found are looking for a simple buying solution that with one decision will give them a computer and Internet access.
The onboard software allows Spanish-speaking consumers to switch back and forth between that language and English. AOL cited data from Synovate 2004 Hispanic Report which stated that only 20 percent of households where Spanish is the primary language are equipped with PCs. However, in bilingual homes where English dominates that number jumps to 55 percent.
To help attract African-American customers AOL will combine three current brands, Black Focus, Black Voices and Africana.com, into a new online portal called Black Voices that will offer African-American-centric programming and content.
The package includes a PC, 17-inch monitor and Lexmark printer. The PC's features include a 2GHz Intel Celeron processor, Windows XP, 256MB of RAM, 40GB hard drive, CD drive, keyboard and speakers.
